Make Your Competition Irrelevant

When a brand sallies forth into the marketplace, there are essentially two bases on which it can compete. The first is competing on brand preference by convincing buyers to opt for Brand A over comparable Brands X, Y, and Z. This is the kind of competition that takes place in well established categories and subcategories, and it is a tough and constant slog. The second, competing on Brand Relevance [the link is to my book of the same title], involves presenting customers with a choice compared to which competitors’ offerings seem irrelevant. This is the route that breakthrough brands take, and is for most marketers the only route to growth and profitability.

Brand preference competition, with its constant “my brand is better than your brand” jockeying, is by far the most common. Marketing strategies geared toward this approach feature constant, incremental enhancements to the offering’s attractiveness, reliability, or price, in hopes of getting buyers to take a second look at a familiar brand. “New and improved” — whether faster, cheaper, or better — is the mantra. They devote even more resources to marketing communications that try to sway buyers with more clever advertising, more impactful promotions, more visible sponsorships, and more involving social media programs than the competition’s.

The problem is that incremental innovation and investments in marketing rarely change the market share structure. Customers are just not inclined or motivated to change brand loyalties in established markets. Their perception is that brands are very similar with respect to the delivery of functional benefits, and often that perception is accurate. Marketing programs rarely break out of the clutter. As a result, a brand preference strategy is usually a recipe for playing catch-up, giving up margin, and, ultimately, succumbing to irrelevance. It is so not fun.

By contrast, consider what Chrysler did when it introduced the Plymouth Voyager and Dodge Caravan in 1983. For customers who found the new concept of the minivan appealing, and they were many, the buying choice wasn’t between a Chrysler vehicle and a Ford or GM vehicle. The latter’s products were irrelevant to their decision. Chrysler had created a new category that it alone occupied, and altered the way that existing customers looked at their purchase decision and use experience. It competed on brand relevance.

The same can be said of Apple’s iPod, Enterprise Rent-A-Car, Seibel Systems, SalesForce.com, Dreyer’s Slow Churned Ice Cream, Whole Foods Market, Zappos.com, Schwab’s OneSource, Mr. Clean Magic Eraser, Westin’s Heavenly Bed, and hundreds of other brands. Every category has its own stories of innovators who created a league of their own, and bought themselves years and sometimes decades with no real competitor.

What does a brand relevance strategy demand of a company? First, the ability to engage in substantial or transformational innovation, which starts with sensing changes in the marketing place and customers’ lives, and then requires the fortitude to commit to a new concept and bring it to market. Second, a shift in focus from building a brand to building the new category or subcategory. And, third, creating barriers to entry against copycats. Certainly not every company is willing to take the risks of going outside the comfort zone of the existing target market, value proposition, and business model.

Those who do, however, stand a chance of creating a category or subcategory in which some or all competitor brands are not visible or credible. The result can be a market in which there is no competition at all for an extended time or one in which the competition is reduced or weakened. The payoff of operating with no or little competition is, of course, huge. It is Econ 101. For 16 years Chrysler had no viable competitor, in part because it continuously innovated behind the product but also because competitors had other priorities. Chrysler’s first year minivan sales topped 200,000 vehicles. To date, the total is some 12.5 million.

Stepping away from fighting brand preference battles and instead winning on brand relevance requires more imagination. But it usually doable, especially at the level of subcategories. It’s always more profitable. And absolutely it is more fun.

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